Factory Manchester overspend nears £20m

The overall cost for Manchester’s mega arts venue The Factory has increased by £19m, months after construction plans were approved for the second time.

The City Council has been advised in an internal report to increase its contribution to the venue’s capital budget to £40.6m, to address issues including the lack of detailed acoustic planning and a longer than expected construction period – taking the total project budget to £130.6m. 

This figure does not include the £9m revenue funding a year being provided through Arts Council England’s National Portfolio scheme.

Rising costs

The recommended changes, which will almost double the council’s contribution to the project, are set to be approved later this month.

A statement from the council said that the cost increase was a result of a robust review of all elements of the building, adding that it was better for issues to be identified and tackled at the design stage than “further down the line when any changes would be more costly”. 

The council said that this approach had ensured a “higher degree of certainty” around the budget and overall programme. 

One of the main reasons for the cost increase is the need to ensure that noise, including from a nearby railway line, is kept out, and that sound inside the versatile spaces is both of the “highest acoustic standards”. “The technical complexities of achieving this, which had not been designed in detail when the original budget was produced, and associated changes to the construction sequencing have added £4.5m,” says the report.

The council is also urged to provide an extra: 

• £5.5m to address higher rates of construction inflation, which it says are at 3% a year and are affected by the scale of development in the city
• £4.8m to reinforce the design team, including £2.7m for increased fees, £975k for “additional design solutions” and £400k for site supervision
• £3m to support longer design and construction periods, which are required by the complexity of the design, and were not “taken into account” by the original budget
• £0.5m to work around “unforeseen elements” including cables and gas supplies found on the site. These were only discovered during a new investigation of the ground, which the council says was only possible once the land was acquired.

Addressing acoustic problems

Architectural practice OMA was re-granted planning permission this summer after its original plans, approved by the local council in January 2017, were found to include an orchestra pit that was too small and compromise the venue’s acoustics.

A spokesperson said the final detailed assessment of additional budget requirements had been left as late as possible to ensure there will not be a further budget increase later on.

The council said the new increase would be entirely funded through receipts from sales of council-owned land, which has “significantly increased in value during the extended design period”. It added that no other council budgets will be affected by the increase, and that it would only sell land to fit an overall strategic plan for the city centre.

“There is no urgent need for the council to dispose of assets so we will only dispose of assets when the time is right and to pursue the strategic planning frameworks for particular areas” a spokesperson added.

The additional funding will join £78.5m in ring-fenced investment from the Treasury. It comes amid ongoing fundraising drives to secure £7m in lottery funding from ACE and £5m in donations.

“There is nothing like The Factory anywhere in Europe, let alone the UK and its game-changing impact for Manchester and the North of England cannot be overstated,” commented Sir Richard Leese, Leader of Manchester City Council.

“It’s a bold and ambitious undertaking and such projects do not come without complex challenges which we have tackled head on now so we can be confident going forwards.”

He continued: “Compromising on The Factory’s quality and ambition would have undermined its uniqueness, its purpose and the benefits it will bring.

“Culture already plays a crucial role in the economy and wider life of the city and The Factory will be a major new destination which will take this to a whole new level.”